European Central Bank Governing Council Member: The unexpected strength of the euro is dragging down inflation, and the impact of tariffs is difficult to assess
European Central Bank Governing Council member Jose Luis Escriva stated that the euro and energy prices are dragging down consumer price growth, while the impact of U.S. tariffs is difficult to assess. He mentioned that the depreciation of the dollar and the appreciation of the euro were unexpected. The European Central Bank will hold a policy meeting on June 5, where a 25 basis point rate cut is expected, along with the release of new economic forecasts. Escriva emphasized that the assessment of tariff impacts will depend on Europe's response and will consider various scenarios for analysis
According to the Zhitong Finance APP, European Central Bank Governing Council member Jose Luis Escriva stated that the euro and energy prices have been dragging down consumer price growth, while the impact of U.S. tariffs is more difficult to assess. He said, "In the short term, some things have even surprised us, such as the depreciation of the dollar and the appreciation of the euro, which is not a normal response in this situation."
When discussing the European Central Bank's upcoming new economic forecasts, Jose Luis Escriva mentioned, "We need to incorporate factors that have a greater impact on inflation volatility into our analysis — we have already seen a general decline in energy and raw material prices, which will affect inflation in the short term."
The European Central Bank will hold its next policy meeting on June 5, during which it will also announce new economic forecasts. A 25 basis point rate cut at the upcoming meeting is almost a certainty, marking the eighth rate cut in this round of easing by the European Central Bank. Some ECB officials have indicated that further rate cuts may be needed thereafter.
Meanwhile, ECB policymakers are uncertain how long the current anti-inflation trend in the eurozone will last and have repeatedly emphasized the uncertainty of the outlook caused by U.S. President Trump's trade policies. Jose Luis Escriva stated, "The situation we see regarding tariffs is more difficult to measure because the impact of tariffs will depend on whether Europe takes retaliatory action." He added that in addition to the baseline scenario, the ECB will propose several scenarios for analysis
